Records retention sounds so clean and dry, so simple. It calls up visions of orderly filing cabinets holding paper documents in tidy folders and searchable electronic recordkeeping systems that are immaculate and always up-to-date. Efficiency fairly hums in the phrase, at least until the details snap into focus, and there are lots and lots of details.
Trucking has multiple layers of recordkeeping requirements, mandated and overseen by various regulatory agencies. For motor carriers, brokers and household goods freight forwarders, the basics of records retention and disposition are generally spelled out by the Federal Motor Carrier Safety Administration (FMCSA) in Title 49, Part 379, of the Code of Federal Regulations.
The famous Appendix A of Part 379 lists all the categories of records and the retention period for each, divided into corporate and general records, treasury, financial and accounting, property and equipment, personnel and payroll, insurance and claims, taxes, purchases and stores, shipping and agency documents, transportation, supporting data for reports and statistics, and miscellaneous, which includes the requirement for an index of all records and a statement listing records permanently destroyed or lost.
Additionally, there are all the specific FMCSA recordkeeping requirements tied to drivers and the job of driving. Fleets must maintain driver hours-of-service records, driver qualification records, drug and alcohol testing records, and health records. There are accident records, driver training and retraining records, and vehicle maintenance records to be properly completed and retained. Emissions-related records mandated by EPA, the California Air Resources Board, and other entities add yet another layer of recordkeeping duties.
No wonder the realities of records management are often so disappointingly unlike the orderly ideal. In its white paper, “7 Ways to Take Control of Your Records Management Program,” Archive Systems offers a few sad statistics on recordkeeping in the real business world, including the fact that managers spend an average of four weeks per year searching for or waiting for misfiled, mislabeled, untracked or lost information. They also note that large organizations lose a document every 12 seconds and that the average cost of recreating a one-page document is $180.
“Trucking companies have to properly manage all their paper and electronic documents, and paper is so much more difficult and dangerous to manage,” says Gregory J. Lofy, president & CEO of Rair. “Doing it yourself in-house is not for the faint of heart, that's for sure.”
GETTING A GRIP
Lofy, like other records experts, stresses the importance of beginning with a comprehensive records retention and disposition policy built upon regulatory requirements and good business practices. “The first step is to have a policy in place for all the documents you hold,” he says. “Because of the nature of litigation today, you need a policy that shows that you destroy all documents on a set schedule, not just those documents that might be harmful to you [in the event of litigation or a compliance audit]. Only deleting certain documents just does not play very well with a jury.
“The next thing you have to do is manage all your paper and electronic records according to that policy. For most companies, that will mean investing in some software and assigning a project manager to oversee the work,” Lofy notes. “You need to really do your homework — to make decisions up front and by individual record about which people should have access to the data and what to keep for how long.”
Archive Systems also stresses the importance of a good retention policy to help companies take control of their records management. “Few things will enable you to take control of your records management program like a well-defined and well-executed retention policy,” the company notes in its white paper. Among the benefits of a proper policy are controlled accessibility through security, preservation of declared records, improved cost management, risk mitigation, litigation preparedness, records lifecycle management, and proper records classification.
Getting there, of course, is the rub. ARMA International, a not-for-profit association for records management professionals, has a wealth of good information for companies working to establish sound paper and/or electronic records retention policies and programs.
It recommends beginning by having a RIM (records and information management) professional create a retention schedule. The first step in that process is to conduct a records inventory by interviewing staff to find out what records exist and in what formats, how they are originated, and who has access to them. Then retention periods can be assigned based upon regulatory or legal requirements, administrative needs, fiscal needs and historical needs.
Once appropriate managers and executives sign off on the records retention schedule, you are off and running — sort of. “Simply keeping records forever, past their usefulness, is neither cost-effective nor prudent,” ARMA cautions. “Vital records, those records that are fundamental to the functioning of an organization and necessary to continue its operations immediately under abnormal conditions…must be identified and protected so they can be retrieved easily in the event of a disaster…Great care must be taken to identify those records that are truly vital to the resumption of business operations; a small percentage of all organizational records are.”
One of the ways companies take that “great care” is by working with outside services to safeguard, audit and manage important records, both active and inactive according to the company's retention policies. “We hold and audit all the FMCSA-required records for a carrier,” says Rair's Lofy. “We keep them in several secure places for safety. Most of what we do is really risk management. We take the pain [of records retention and management] away by dealing with the burden of legal compliance.”
Mozy is a company that specializes in retaining “mirror” records of active electronic documents for a variety of businesses, including truck fleets, and stresses the importance of secure storage of those documents. “Any records-retention plan should have two components,” says Dave Robinson, vice president of marketing for Mozy. “There should be secure onsite storage and secure offsite storage.”
At Mozy, that involves using the Internet to manage records retention and access. The advantage to the cloud is that it is cost-effective, backups can run automatically, and you can manage access to data, notes Robinson. But there are challenges, too. He recommends asking several key questions:
What sort of security is provided against hacking, damage, theft, etc?
Who can see my data?
Is the management software easy to use?
Companies need to look into the sort of security that is provided, both where the records are stored and how they are accessed, he says. Mozy relies on “world-class” secure data storage facilities and sends encrypted data over secure connections, according to Robinson. When it comes to data access, they use “keys” in addition to passwords.
“We offer two types of keys,” he says. “Keys we generate or keys provided by the business owner. If the customer provides the key, we have to direct anyone who wants to see the data, such as the law, back to the company itself because we have no access to their files.”
Customers who want to restore data use a password to get to the files they require, he explains. Because those records are all encrypted, however, it also takes the right key to unlock them — double security.
So what about those battered metal drawers of manila file folders stuffed with paper records? Most trucking companies still have some and that is just fine, at least for now, according to Archive Systems. “Everyone wants to get to the paperless office because it will increase process efficiencies,” it notes. Since so many documents companies keep are inactive, however, “it makes sense to retain them physically in a low-cost model and only scan them in on an on-demand basis. After all, there is no reason why you should take on the expense of converting inactive documents to digital until they are needed.”
To have and to hold
According to Title 49, Part 379, of the Code of Federal Regulations, records must be protected from “fires, floods and other hazards” and must also be safeguarded from “unnecessary exposure to deterioration from excessive humidity, dryness or lack of ventilation.” Most records must be retained for a period of three to five years, after which they may be destroyed at the discretion of the company's management.
Any technology may be used to preserve records as long as it is “immune to alteration, modification, or erasure of the underlying data and will enable production of an accurate and unaltered paper copy.”
ARMA International (www.arma.org) is an online resource for companies that want to create or improve their records retention system. The glossary of records retention terms alone is worth the visit to the website. Some terms to learn right away:
Active record: A record needed to perform current operations, subject to frequent use and usually located near the user.
Destruction: The definitive obliteration of a record beyond any possible reconstruction.
Inactive record: A record no longer needed to conduct current business but preserved until it reaches the end of the retention period.
Legal hold: A communication issued as a result of current or anticipated litigation, audit, government investigation or other such matter that suspends the normal disposition or processing of records.
Legal value: The usefulness of a record in complying with statutes and regulations, as evidence in legal proceedings, as legal proof of business transactions, or to protect an individual's or organization's rights and interests.
Records inventory: A detailed listing that includes types, locations, dates, volumes, equipment, classification systems and usage data of an organization's records in order to evaluate, appraise and organize the information.